A health insurance plan has become an essential requirement. Given the healthcare costs, a health insurance plan helps individuals protect their finances against high medical costs. Given the benefits provided by a health plan, many individuals invest in a health insurance plan for themselves and their families. But do they understand all facts about the policy before buying?
Many don’t. They don’t fully understand the policy and its benefits. This is either because of lack of awareness or ignorance. As a result, the policy benefits are not fully utilised. So, here are some lesser known facts about buying health insurance which policyholders should know –
- PPN rates are lower than cash rates for listed illnesses
There are some listed illnesses in health insurance plans offered by Government -backed insurance companies. For these listed ailments, the Preferred Provider Network (PPN) rates at tied-up hospitals are lower than cash rates. While many individuals owning a health plan of public companies feel that reimbursement claims are better, they are mistaken. For listed illnesses, cashless claims are better as they are lower. For instance, for placing a stent in the heart, the PPN rate might be Rs.1.2 lakhs through cashless settlement while the cash rate for reimbursement claims might be Rs.1.5 lakhs. So, clients should be encouraged to choose PPN rates at the time of claims if they are buying a health plan from a Government health insurance provider.
- All health plans have lifelong renewal
The Insurance Regulatory and Development Authority (IRDA) has directed health insurance plans to offer lifelong renewal facility. As such, there is no maximum coverage age and health plans come with lifelong renewals. The policyholder can, therefore, enjoy coverage for his entire life by renewing the health plan regularly.
- Claim-based premium loading is a thing of the past
Many policyholders fear that after making a claim their premium rate in the subsequent year would increase. This is no longer the case. While health plans followed this concept earlier, in recent times, the concept is obsolete. The premium depends on the age bracket and the sum insured opted. It doesn’t increase based on the claim history of the policyholder.
- Room rent sub-limit is applicable even if the total claim is lower than the sum insured
In many health insurance plans there are sub-limits on the admissible room rent. This sub-limit is an important factor at the time of claim which is often ignored by policyholders. If the actual rent is higher than the allowed sub-limit, the entire inpatient hospitalisation cost incurred is affected. The insurance company doesn’t pay the entire claim in this case. The claim is reduced in proportion to the allowed sub-limits. Let’s understand with the help of an example –
Suppose, in a health plan of Rs.5 lakhs, the allowed room rent sub-limit is 1% of the sum insured. This comes to Rs.5000/day. The actual room rent incurred is Rs.7500/day. The total inpatient hospitalisation bill for five days of admission comes to Rs.50, 000. Though the claim is within the sum insured limit of Rs.5 lakhs, the insurance company doesn’t settle the entire claim. The settlement would be – (5000/7500) * 50, 000 = Rs.33, 333.
- Day care treatments and free health check-ups provide enhanced coverage
Almost all health insurance plans cover day care treatments and provide free health check-ups. Day care treatments are those which do not require a continuous hospital stay for 24 hours due to advanced medical technology. Free health check-ups, on the other hand, cover regular health check-ups after a specified number of years. Many policyholders are unaware of these coverage benefits and they fail to utilise their health plans fully.
Though health insurance plans provide a wide gamut of coverage benefits, they are not fully understood by many. You should, therefore, educate your clients on these lesser known health insurance facts. When your clients understand the true benefits of their health plans, they would invest in the plan easily. So, understand these facts and help your clients understand them too so that they can enjoy full benefits provided by health plans.
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